Some believe that if bigger businesses and players make a wrong move, it may be difficult for other growth opportunities to come up, so they can keep up with the pace of innovation.
One of the challenges faced by bigger companies is that they are simply too big. It is a well-worn cliché that big firms in any industry manoeuvre like oil tankers. Decision-making is slow, and attitudes to risk are conservative. For industries that are based on innovation and growth, this is more than just a frustration; it is a terminal condition.
Seth Godin, in his 2007 book ‘Small is the New Big ‘, stated that “today, little companies often make more money than big companies.” So, when an established business takes over a dynamic young enterprise, great care should be taken not to smother the youthful enthusiasm of the smaller business. In fact, the smart players know that the real value exists not just in the new entities, but in the passion and innovative drive of the team. Keep reading, as we go into a few examples of why smaller businesses are good.
Advantages of smaller organisations over large:
More open
In an environment with fewer than 100 employees, everyone should know each other, their roles, strengths and working styles. The departmental divides that spring up in large firms don’t exist in the smaller businesses; consequently, communication is clearer, quicker and more honest.
Braver
Working for a small business is perceived to be less secure than working for a large institution, because they are thought to be at higher risk than larger companies. This bravery includes the ability to admit something is wrong. One of the greatest threats to large companies is the reluctance to call time on projects that are destined to fail.
Energetic
A clear sense of purpose and place generates energy alongside the knowledge that every role counts. Seeing the business process from inception through to delivery is tremendously motivating and rarely communicated in large organisations.
Decisive
The closeness of relationships leads to speedy decision-making. There is no place for procrastination; leaders have to lead.
Innovative
Informality, a sense of fun and a genuine desire to serve the business all encourage original thinking throughout the entire culture.
Trusting
Gained from the sense of team that comes from having a shared goal, combined with a small community of employees. Essential if an organisation is to function efficiently.
Taking risks
Another thing larger companies should know is that entrepreneurship is not a skill that can be taught in business schools; it is an attitude that must be modelled and encouraged by leaders. It requires space in which to operate, freedom to take risks and a culture that accepts failure not as a threat but as a sign of progress.
Leaders must choose between staying big and becoming increasingly less efficient or finding new structures that encourage innovation and are places in which the brightest people want to work.
